To help Switzerland’s export-oriented sectors withstand US trade tariffs, the government supports an ‘urgent extension of short-time work benefits.’ What exactly does this mean?
An extension is being sought because the previous ordinance to this effect expired on July 31st, 2025.
However, the extension is urgently needed because the 39-percent customs duties imposed by the Trump administration on Swiss imports “represent a considerable burden for the companies affected,” the Federal Council said on September 3rd.
It therefore supports the parliamentary move to extend short-time work benefits – KAE in German, RHT in French, and ILR in Italian – to Swiss businesses likely to be most impacted by Europe’s steepest tariffs.
READ ALSO: What ‘damage’ are US tariffs likely to have on people in Switzerland?
What is KAE/RHT/ILR and how does it benefit employees?
According to the government, “short-time working refers to a temporary reduction or complete suspension of work at a company, whereby the contractual employment relationship remains in place.”
In other words, this system is not intended for companies that go out of business altogether, but only for those facing temporary financial difficulties out of their control and, therefore, are unable pay their employees’ wages, either wholly or partially.
The aim of KAE/RHT/ILR is to prevent redundancies resulting from such unusual events – as was the case during the Covid pandemic, when many companies had to temporarily cease working, and currently, with 39-percent customs duties affecting Switzerland’s export-oriented industries.
“Short-time work is a proven instrument for mitigating the consequences of economic downturns and protecting threatened jobs,” the government explained.
Advertisement
How much is KAE/RHT/ILR, and who pays for it?
In a way, it is self-funded.
That’s because the unemployment insurance – to which all companies and employees contribute – covers employers affected by the KAE/RHT/ILR for a proportion of their salary costs.
Concretely, it amounts to 80 percent of the loss of earnings attributable to the reduction in working hours.
However, if you are employed by a company suffering consequences of the US tariffs and your full salary is not guaranteed, you cannot apply for this money yourself.
Instead, it is up to your company to submit an application for short-time working compensation to the responsible cantonal employment office, providing the documentation to justify its request.
In contrast to unemployment benefits, which are paid directly to the redundant employee, the KAE/RHT/ILR is paid to the employer, who must continue to pay the workers their full salaries.
